On the Economics of Corporate Responsibility
AbstractThis paper seeks to explore the economic mechanisms behind corporate social responsibility (CSR) in a micro-economic model of the firm. The motivation of this study is to shed some light on the potential causes of the observed phenomena of voluntary over-compliance among firms. We consider a few diferent models, both static and dynamic, to investigate how various assumptions about costs and benefits may aspect CSR behavior through a stock of goodwill capital. Our analysis show that in optimum, the profit maximizing firm must balance costs and benefits of CSR. From a cursory look into the CSR literature, we find evidence that some of the hypotheses that can be derived from the models in this paper can be verified empirically.
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Bibliographic InfoPaper provided by Sustainable Investment Research Platform in its series Sustainable Investment and Corporate Governance Working Papers with number 2007/3.
Length: 39 pages
Date of creation: 22 Nov 2007
Date of revision:
Contact details of provider:
Postal: Economics of Corporate Sustainability Management, Department of Industrial Economics and Management, Royal Institute of Technology, SE-100 44 Stockholm, SWEDEN
Phone: 08-790 78 61
Fax: 08-790 76 17
Web page: http://www.sirps.se
More information through EDIRC
corporate social responsibility; dynamics; goodwill; uncertainty;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-24 (All new papers)
- NEP-BEC-2008-05-24 (Business Economics)
- NEP-SOC-2008-05-24 (Social Norms & Social Capital)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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